Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: carranza2 who wrote (73362)	5/7/2010 5:07:26 PM
From: Maurice Winn	1 Recommendation of 74559

It looks as though the computers shot some shareholders in one company to make an example of them and to frighten the mob of shareholders in other companies into a stampede during which the trading profits would be enormous. <On the big board, shares of Procter & Gamble (PG) swooned 37 percent from $62 to $39 a share. The consumer-goods maker is a big component of the Dow Jones Industrial Average index, which features 30 big, corporate names. PG's stock move alone pushed down the Dow by more than 150 points, causing broad alarm among investors, followed by panicked selling, according to the NYT.> Human and computer stampedes and panics have got their own mathematical processes. The mathematicians have to model how those stampedes and panics work. So they induce them to see how the reactions go. But they have to be careful because opposition mathematicians and computers are doing the same thing. It ends up Goedelian in a self-referential modeling of yourself by watching what the other models are doing - in a fast feedback loop. The mathematicians will have quite a project on their hands to be the champions and end up with the money. But it's worth doing. The losing mathematicians will lose their money and have to go back to something more suited to their talents. The computers obviously figured out that it was worth losing $millions or $billions temporarily to put the frighteners on the other programmes and shareholders. The other programmes would say "You are betting THAT much?!! Good God, I'm outa here." But one would say "I'll see your $billion and raise a $billion". Stop loss orders were cleaned out. More sell orders were precipitated. Then the computers bought up all the panicked sellers on the way back up. It looks like markets working as they should. Nothing to worry about. Move along please. Mqurice

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